Australia\u2019s economy expanded at its fastest pace in nearly three\u00a0years in the December quarter, with stronger-than-expected growth driven by government spending, private investment and a lift in consumer activity tied to major retail events.<\/p>\n
New data from the Australian Bureau of Statistics (ABS) shows gross domestic product (GDP) rose\u00a00.8% in the December quarter, accelerating from\u00a00.4% in the previous quarter. Annual growth climbed to\u00a02.6% from 2.1%, beating economists\u2019 expectations of around\u00a02.3%.<\/p>\n
The latest figures mark the\u00a017th consecutive quarter of economic expansion, with growth broadly supported across the economy.<\/p>\n
ABS head of national accounts Grace Kim said activity strengthened across most sectors during the quarter.<\/p>\n
\u201cThere was broad-based economic growth in the quarter, with rises observed in a large majority of industries,\u201d Kim said.<\/p>\n
\u201cPublic and private demand each contributed 0.3 percentage points to GDP growth.\u201d<\/p>\n
GDP per capita also continued to recover, rising\u00a00.4% quarter-on-quarter\u00a0and\u00a00.9% over the year, marking the strongest annual increase since the December quarter of 2022.<\/p>\n
Treasurer Jim Chalmers welcomed the figures, saying the data demonstrated the economy\u2019s resilience during a period of heightened geopolitical and economic uncertainty.<\/p>\n
\u201cThese really encouraging numbers are a very robust foundation from which we confront intense global economic volatility,\u201d he said.<\/p>\n
\u201cThe defining story of the Australian economy in 2025 was the pick-up in private sector activity, which these figures confirm.\u201d<\/p>\n
Spending lifts, but households keep saving<\/p>\n
Despite the stronger headline growth, underlying consumption remained relatively subdued. Household spending increased\u00a00.3% in the quarter, with discretionary spending lifted by strong attendance at sporting events and concerts as well as expanded\u00a0Black Friday retail promotions.<\/p>\n
Spending growth was concentrated in discretionary categories such as\u00a0hotels, caf\u00e9s and restaurants (+1.4%),\u00a0recreation and culture (+0.8%), and\u00a0furnishings (+2.1%), while essential categories such as electricity and gas fell sharply.<\/p>\n
At the same time, households continued to rebuild savings, with the\u00a0saving-to-income ratio rising to 6.9% from 6.1%, the highest level since September 2022, reflecting ongoing cost-of-living pressures.<\/p>\n
Government spending also remained a key contributor, rising\u00a00.9% during the quarter, while private investment increased\u00a00.7%, supported by construction activity tied to renewable energy projects and data centre development.<\/p>\n
Inventories also boosted output, contributing\u00a00.4 percentage points to GDP, while\u00a0net trade detracted 0.1 percentage points, as imports grew faster than exports.<\/p>\n
Exports were nevertheless supported by strong commodity demand, including record values for non-monetary gold exports and continued demand for metal ores and minerals from China.<\/p>\n
According to\u00a0Tony Sycamore, market analyst at IG, the stronger GDP result came with some mixed signals for policymakers.<\/p>\n
\u201cAustralia\u2019s Q4 GDP figures came in with a decent kick, lifting annual growth to 2.6%, comfortably above the RBA\u2019s forecast of 2.3%,\u201d he said.<\/p>\n
\u201cThat said, there was softness in the underlying details, with household consumption subdued and the savings ratio rising, suggesting cost-of-living pressures are still weighing on spending.\u201d<\/p>\n
Sycamore said the data may ease pressure on the\u00a0Reserve Bank of Australia\u00a0ahead of its upcoming policy meeting.<\/p>\n
\u201cToday\u2019s numbers likely lean toward the RBA holding the cash rate steady at\u00a03.85%\u00a0in March and waiting for the next quarterly inflation data before making any further moves.\u201d<\/p>\n
The central bank has previously warned that stronger private demand in the second half of last year contributed to a renewed lift in inflation pressures, which remain above its\u00a02\u20133% target band.<\/p>\n","protected":false},"excerpt":{"rendered":"Australia\u2019s economy expanded at its fastest pace in nearly three\u00a0years in the December quarter, with stronger-than-expected growth driven…\n","protected":false},"author":2,"featured_media":517218,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-517217","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/517217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=517217"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/517217\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/517218"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=517217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=517217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=517217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}